1 2 3 4 TORONTO COMPUTER LEASING INQUIRY 5 6 7 8 ******************** 9 10 11 BEFORE: THE HONOURABLE MADAM JUSTICE DENISE BELLAMY, 12 COMMISSIONER 13 14 15 16 17 Held at: East York Civic Centre 18 850 Coxwell Avenue 19 Toronto, Ontario 20 M4C 5R1 21 22 ******************** 23 24 25 May 21st, 2003

2
  1                        APPEARANCES
  2  Ronald Manes            )Commission Counsel 
  3  Patrick Moore  (np)     )
  4  Daina Groskaufmanis     ) 
  5  Linda Rothstein         )City of Toronto 
  6  Lily Harmer    (np)     )
  7  Robert Centa            )
  8  Gordon Capern  (np)     )
  9  David Moore             )MFP 
 10  Fraser Berrill  (np)    ) 
 11  Ken Jones      (np)     ) 
 12  Brian Heller   (np)     )Ball Hsu and Associates Ltd.
 13  Melissa Kronick (np)    )CUPE 
 14  Raj Anand      (np)     )Lana Viinamae
 15  Bay Ryley               )
 16  William Anderson        )Wanda Liczyk
 17  Valerie Dyer    (np)    )Dell Computers
 18  Jennifer Lynch   (np)   )
 19  Edward Greenspan (np)   )Jeff Lyons
 20  Todd White     (np)     )
 21  Hugh MacKenzie          )Jim Andrew
 22  Jennifer Searle (np)    )
 23  Alan D. Gold            )Tom Jakobek
 24  Lorne Honickman         )
 25  Joyce Ihamaki           )Registrar

1 TABLE OF CONTENTS 2 Page No. 3 Exhibits 4 4 5 THOMAS R. JAKOBEK; Resumes 6 Continued Examination-in-Chief by 7 Mr. Ronald Manes 10 8 Cross-Examination by Ms. Bay Ryley 30 9 Cross-Examination by Mr. Hugh MacKenzie 94 10 Cross-Examination by Mr. William Anderson 127 11 Cross-Examination by Mr. David Moore 185 12 13 Certificate of Transcript 216 14 15 16 17 18 19 20 21 22 23 24 25

1 EXHIBITS 2 No. Description Page No. 3 4 33 VOLUME I Bound document titled 5 "Tom Jakobek" Tab 92 6 removed to Exhibit 7 33 Volume II, Tab 77 126 8 9 33 VOLUME II Bound document titled 10 "Tom Jakobek" additional 11 Tabs 77-91 126 12 13 14 35 Bound document titled "Year 15 2000 Steering Committee 16 Minutes" tabs 1-80 209 17 18 33 VOLUME II Bound document titled 19 "Tom Jakobek" additional 20 Tabs 68-76 215 21 22 23 24 25

1 --- Upon commencing at 10:00 a.m. 2 3 REGISTRAR: The Inquiry is now in session. 4 Please be seated. 5 MADAM COMMISSIONER: Good morning. 6 MR. ALAN GOLD: Commissioner, before we 7 start -- 8 MADAM COMMISSIONER: Yes? 9 MR. ALAN GOLD: -- on reviewing the 10 transcript, there are three (3) comments I wish to make about 11 the evidence regarding Mr. Peerenboom. 12 And the first one (1) is not a correction, 13 but, we received a communication that somehow, somebody 14 understood Mr. Jakobek to testify that Mr. Peerenboom had 15 told him the flight to Philadelphia was his flight. 16 Now, I checked the transcript and I thought my 17 client made it clear that he was assuming that, that he 18 inferred that. 19 MADAM COMMISSIONER: Yes, that's how I took 20 it. 21 MR. ALAN GOLD: But, I just -- somehow, some 22 people out there think different. 23 MADAM COMMISSIONER: Oh, okay. 24 MR. ALAN GOLD: I just wanted to make clear 25 that I hadn't missed anything in the testimony.

1 MADAM COMMISSIONER: Okay. We could -- I'm 2 happy to have Mr. Manes clear that up with Mr. Jakobek, today 3 if you like. 4 MR. ALAN GOLD: No problem. The other thing 5 is that, Mr. Jakobek, feels that he should apologize for that 6 comment which we took as a jest at the time about, you don't 7 want to know him or something about Mr. Peerenboom, and it 8 might be viewed as somewhat insulting or derogatory. 9 And I believe, my client would like to 10 apologize for that comment. 11 MADAM COMMISSIONER: Okay. 12 MR. ALAN GOLD: If he could be given a chance. 13 MADAM COMMISSIONER: Absolutely. 14 MR. ALAN GOLD: And as well -- as well -- it 15 might have been left the impression that Mr. Peerenboom 16 obtained those playoff tickets we heard about in a nefarious 17 manner. 18 And I -- Mr. Jakobek would like to clear up 19 that, in fact, he was paid for those tickets. And I'll leave 20 that to Mr. Manes -- 21 MADAM COMMISSIONER: Okay -- 22 MR. ALAN GOLD: -- if he wishes to do so. 23 But, he didn't mean to suggest that Mr. Peerenboom had done 24 anything wrong in obtaining those tickets. 25 MADAM COMMISSIONER: Okay.

1 MR. ALAN GOLD: Okay. And as well, Mr. 2 Commissioner, I want to correct something -- Madam 3 Commissioner -- 4 MADAM COMMISSIONER: That's okay, I know 5 you've had a -- 6 MR. ALAN GOLD: It's been a -- 7 MADAM COMMISSIONER: -- you probably had a 8 hard day at the Court of Appeal yesterday. 9 MR. ALAN GOLD: Oh, my gosh, this is a 10 vacation. Just kidding. 11 MADAM COMMISSIONER: You better put that on 12 the transcript. 13 MR. ALAN GOLD: When the issue of the letter 14 to the Star which Mr. Manes will carry on with, arose 15 unexpectedly Friday or Thursday when we sat. 16 Obviously we wanted to inform ourselves, and 17 we got in touch with Mr. Roebuck who is on vacation and 18 subsequently he faxed us certain materials and Mr. Manes will 19 go into this, but, I just want to correct something, on page 20 194-95, regarding the graph -- 21 MADAM COMMISSIONER: Is that on the 15th of 22 May? 23 MR. ALAN GOLD: Yes, the last day we sat. 24 MADAM COMMISSIONER: Yes. 25 MR. ALAN GOLD: I think it's now agreed and

1 Mr. Roebuck is -- first of all we want to make it clear and 2 Mr. Jakobek wants to make it clear that the letter that was 3 sent to the Star, was his responsibility and if he left any 4 impression that Mr. Roebuck was responsible, he wishes to 5 clear that up today. 6 Mr. Roebuck was acting on the instructions 7 that he had on the time and believed he was sending a letter 8 in good faith and that Mr. Jakobek will explain his role now 9 in -- with regard to that because he has had a chance to have 10 his recollection refreshed by an understanding of the process 11 that led into that letter. 12 But it -- it appears -- I don't know quite how 13 to -- the -- the January 24th draft, which we no longer claim 14 privilege for because it was the initial letter, was 15 circulated and it appears that although he didn't retain a 16 copy, Mr. Jakobek received a copy of, that as a result of -- 17 then there was a weekend. The 24th was a Friday. The letter 18 was sent on the 27th. Mr. Jakobek was correct -- 19 MR. RONALD MANES: Commissioner? 20 MADAM COMMISSIONER: Yes? Yeah, sorry. I 21 just want to make sure, actually, before Mr. Manes goes, I 22 heard you to say you're no longer claiming privilege on the 23 January 24th letter? 24 MR. ALAN GOLD: That's -- that's correct 25 because -- because it is a draft and Mr. Jakobek will talk

1 about that. What I wanted to say was on -- on those two (2) 2 pages, at that time I indicated that we -- we hadn't -- like, 3 it's -- it's a little fuzzy. I don't want to say anything 4 that's misleading -- 5 MADAM COMMISSIONER: Okay. 6 MR. ALAN GOLD: -- and so on that page, to the 7 extent that it's indicated that the 24th item wasn't 8 circulated in advance, that should be cleared up too. 9 MADAM COMMISSIONER: Okay. 10 MR. ALAN GOLD: That was the recollection -- 11 the unassisted recollection at the time. So I just wanted to 12 make that clear. 13 MADAM COMMISSIONER: All right. 14 MR. ALAN GOLD: Okay? And then we have had 15 discussion with Commission Counsel and that has led to 16 further evidence today, Madam Commissioner. 17 MADAM COMMISSIONER: Okay. 18 MR. ALAN GOLD: Is that okay, Mr. Manes? 19 MADAM COMMISSIONER: Mr. Manes, were you 20 wanting to say something? 21 MR. RONALD MANES: No. 22 MADAM COMMISSIONER: Mr. Gray, can I see you 23 for a second? 24 25 (BRIEF PAUSE)

1 2 MADAM COMMISSIONER: Yes, Mr. Manes. Ms. 3 Rothstein, were you wanting to say something? 4 MS. LINDA ROTHSTEIN: I was going to interject 5 because I thought we were going to hear from Counsel for Mr. 6 Jakobek what Mr. Jakobek was going to say -- 7 MADAM COMMISSIONER: Oh. 8 MS. LINDA ROTHSTEIN: -- and I was going to 9 suggest, Commissioner, that we should actually hear that from 10 the witness and not his lawyer. 11 MADAM COMMISSIONER: I think -- I think Mr. 12 Gold made it clear that we are going to be hearing that from 13 Mr. Jakobek today. Good morning, Mr. Jakobek. 14 THE WITNESS: Good morning, ma'am. 15 MADAM COMMISSIONER: We're ready to start. 16 17 (WITNESS RESUMES) 18 19 EXAMINATION-IN-CHIEF CONTINUED BY MR. RONALD MANES: 20 Q: Good morning, Mr. Jakobek. 21 A: Good morning, Mr. Manes. 22 Q: Mr. Jakobek, on May the 15th at page 191. 23 A: I'm sorry, Mr. Manes, is there a tab or 24 something you're reading. 25 Q: It's on -- I'll --

1 MADAM COMMISSIONER: He's actually -- 2 MR. RONALD MANES: I'll give you -- 3 MADAM COMMISSIONER: -- reading -- 4 MR. RONALD MANES: -- the evidence. 5 MADAM COMMISSIONER: -- from the transcript. 6 THE WITNESS: Okay. I'm sorry. 7 MADAM COMMISSIONER: No, it's not your fault. 8 You would have no way of knowing that that's what he's doing. 9 10 CONTINUED BY MR. RONALD MANES: 11 Q: At page 191 of the transcript and that 12 would be lines 21 to 25 and then over to 192, line 2. I 13 asked you and you responded as follows: 14 "Mr. Jakobek, yesterday morning and this 15 morning, as well, I believe you testified 16 that you were always willing to come here 17 to the Commission to tell the truth and to 18 set the record straight. Would you agree 19 with me that was the sum and substance of 20 your testimony on both days?" 21 Answer: "Yes, that's absolutely correct." 22 That statement was -- that question was asked 23 and that statement was made by you, yes, that's absolutely 24 correct that you intended on both of those days to come to 25 the Commission to tell the truth and to set the record

1 straight? 2 A: Correct. 3 4 (BRIEF PAUSE) 5 6 Q: And on May the 15th at page 208, 7 subsequent to me asking you those questions, I asked you 8 questions about whether you had seen the letter that was sent 9 by Mr. Roebuck to the Toronto Star dated January 27th, 2003 10 prior to it going out and in effect, whether you approved it 11 and you stated at page 208, lines -- line 4, quote: 12 "But I didn't see the letter until after he 13 sent it out." 14 MADAM COMMISSIONER: After he sent it. 15 MR. RONALD MANES: After he sent it out. 16 MADAM COMMISSIONER: It doesn't say, out. 17 MR. RONALD MANES: Oh, sorry. I just --: 18 "But I didn't see the letter after he sent 19 it." 20 THE WITNESS: This is the letter of January 21 27th? 22 MR. RONALD MANES: That's right. 23 MADAM COMMISSIONER: It says, let me read it, 24 because you've mis-read it again: 25 "But, I didn't see the letter until after

1 he sent it." 2 Okay. That's what -- 3 THE WITNESS: This is the January 27th final 4 letter? 5 MADAM COMMISSIONER: Yes. 6 THE WITNESS: Right. Okay. Yes, my answer 7 is, that's correct. 8 MR. RONALD MANES: Now, Mr. Jakobek, I want 9 you to turn to that January 27th, 2000 letter. That's should 10 be in your Volume 1 at Tab 91. 11 12 (BRIEF PAUSE) 13 14 MADAM COMMISSIONER: 92 is it? 15 MR. RONALD MANES: My mark is 91, it could be 16 92. 17 MADAM COMMISSIONER: 91 is the letter to Mr. 18 Lastman from Mr. Garrett. Is it in Volume -- I don't know 19 that we have put it anywhere yet, have we. 20 MS. DAINA GROSKAUFMANIS: I think it was said 21 on the record the 15th of May, Madam Commissioner, that it 22 was going to be Tab 91. I know we were adding a number of 23 Tabs at the end of the day. 24 It was probably supposed to be Tab 92. We can 25 clear this up later. I don't want to interrupt Mr. Manes

1 testimony just because -- 2 MADAM COMMISSIONER: Mr. Manes isn't giving -- 3 MS. DAINA GROSKAUFMANIS: I'm sorry, Mr. Manes 4 questioning. Binder 1 is so full, we may actually put it in 5 Volume 2. 6 MADAM COMMISSIONER: Volume 2. Okay. 7 Okay. 8 MS. DAINA GROSKAUFMANIS: I have extra copies 9 if -- 10 MR. RONALD MANES: I put the letter in front 11 of Mr. Jakobek. 12 MADAM COMMISSIONER: All right. Fine. Thank 13 you. We've got the letter there, let's go. 14 15 CONTINUED BY MR. RONALD MANES: 16 Q: Mr. Jakobek, you've had the weekend to 17 reflect on your evidence. You've spoken with your lawyers, I 18 take it and as Mr. Gold, has indicated there have been 19 discussions with Mr. Roebuck. 20 Mr. Jakobek, did you see the January 27th, 21 2003 letter, before it went out to the Toronto Star, under 22 Mr. Roebuck's signature? 23 MR. ALAN GOLD: Okay, I --sorry -- with my 24 knowledge, I can see the problem with the question. 25 If you take it literally Mr. Manes -- does Mr.

1 Manes mean only the January 27th or does he mean the 24th and 2 27th considered as one (1) item? 3 MR. RONALD MANES: I'm asking simply on the 4 January 27th, 2003 letter -- 5 MADAM COMMISSIONER: Okay. 6 MR. ALAN GOLD: That one (1) -- 7 MADAM COMMISSIONER: Okay. Mr. Manes, just go 8 ahead with that question and then we'll see if you have any 9 more arising from that. 10 11 CONTINUED BY MR. RONALD MANES: 12 Q: Did you, in fact sir, see the January 13 27th, 2003 letter, into your lawyer's hands, to the Toronto 14 Star before that letter went out? 15 A: I believe my best recollection is that 16 this specific letter, January 27th, 2003, in its final form, 17 signed, I did not see until after it went out. 18 Q: Then, sir, I asked you some questions 19 about a January 24th, 2003 draft letter last week and there 20 was some objection on its production. 21 I take it there is no such objection now? 22 MR. ALAN GOLD: No. 23 MADAM COMMISSIONER: Thank you. So, that was 24 then -- 25

1 (BRIEF PAUSE) 2 3 THE WITNESS: Thank you. 4 MADAM COMMISSIONER: So that will be Tab 65 of 5 -- or is it -- it will be the following Tab. 6 MS. DAINA GROSKAUFMANIS: Madam Commissioner, 7 it will be the following Tab. There were additional 8 documents added this morning -- 9 MADAM COMMISSIONER: Oh, I see -- 10 MS. DAINA GROSKAUFMANIS: -- so perhaps just 11 at the break, I can clear up what Tab it will be. 12 MADAM COMMISSIONER: Okay. 13 Thanks. 14 MR. RONALD MANES: That will be Tab? 15 MADAM COMMISSIONER: Don't worry about it. 16 Just ask the questions. 17 18 CONTINUED BY MR. RONALD MANES: 19 Q: Did you see the January 24th, 2003 letter 20 before it went out -- before it -- in that draft form, sir, 21 before the -- the January 27, 2003 letter went out? 22 A: Yes, sir. 23 Q: Now, on May 15th, I asked you, as well, 24 whether you had authorized your lawyer to make the following 25 statement in the January 27th, 2003 letter that went to the

1 Toronto Star: 2 "Mr. Jakobek has stated that he did not 3 attend on such trip and will repeat that 4 under oath when he gives evidence at the 5 Inquiry." 6 Do you remember a -- me asking you those 7 questions? 8 A: Yes, sir. 9 Q: And remember you answering that you did 10 not authorize your lawyer to make those statements on your 11 behalf, as you had not seen that this letter had gone out 12 before it went out? 13 A: I don't have that part of the transcript 14 in front of me, so I -- I'm -- 15 Q: Well, let me ask you, then, right now -- 16 A: If you could just -- 17 Q: Let me ask -- 18 A: If you -- 19 Q: -- this right now. Did you authorize your 20 lawyer on -- prior to this January 27th, 2003 letter going 21 out to state as follows: 22 "Mr. Jakobek has stated that he did not 23 attend on such a trip and will repeat that 24 under oath when he gives evidence at the 25 Inquiry."

1 Did you authorize your lawyer to make that 2 statement on your behalf to the Toronto Star in the January 3 27th, 2003 letter? 4 A: I -- I believe so, yes. 5 Q: The answer is yes? 6 A: Yeah. 7 MADAM COMMISSIONER: He said I believe so. 8 THE WITNESS: This is the draft of the 24th, 9 yes. 10 11 CONTINUED BY MR. RONALD MANES: 12 Q: I'm talking about the 27th of January, 13 2003. The statement made by your lawyer in that letter that 14 went to the Toronto Star says: 15 "Mr. Jakobek has stated that he did not 16 attend on such a trip and will repeat that 17 under oath when he gives evidence at the 18 Inquiry." 19 Did you authorize your lawyer to make that 20 statement on your behalf to the Toronto Star? 21 A: Correct. I authorized him to send the 22 letter, yes. 23 Q: Did you authorize -- 24 A: And the statements in -- 25 Q: -- your lawyer --

1 A: And the statements in the letter, yes, Mr. 2 Manes. 3 Q: And specifically the statement that I just 4 made to you? 5 A: Yes, I believe so. 6 Q: All right. Now, then, if we can turn to 7 the January 24th, 2003 draft letter. You saw this draft 8 letter before the January 27th, 2003 final letter went out? 9 A: I believe so, yes. 10 11 (BRIEF PAUSE) 12 13 Q: And in that letter, sir -- the draft 14 letter, as well, states, third paragraph: 15 "Mr. Jakobek has stated that he did not 16 attend on such a trip and will repeat that 17 under oath when he gives evidence at the 18 Inquiry." 19 A: Correct. 20 Q: And in that respect, both of -- the draft 21 letter that you saw and the January 27th, 2003 letter that 22 you both saw and authorized contained that same statement? 23 A: Correct. 24 25 (BRIEF PAUSE)

1 Q: If I might have a moment. 2 3 (BRIEF PAUSE) 4 5 Q: Let's clear up some things about Mr. 6 Roebuck, Mr. Jakobek. Firstly, is it true that you told Mr. 7 Roebuck that you did not attend on the trip to Philadelphia? 8 A: Correct. 9 Q: Is it true that you told Mr. Roebuck, that 10 you would repeat that under oath, when you gave evidence at 11 this Inquiry? 12 13 (BRIEF PAUSE) 14 15 A: Mr. Manes, it's contained in the letter. 16 I have to assume the letter is correct. I don't have a 17 recollection of the details of my conversation with my lawyer 18 and the exact wording. 19 But, I definitely told my lawyer, that I was 20 not on the flight to Philadelphia, yeah. 21 Q: And you say now, that you have no 22 recollection of whether you told your lawyer that you were 23 going to repeat that under oath, when you gave evidence at 24 the Inquiry? 25

1 (BRIEF PAUSE) 2 3 A: Mr. Manes, it was contained in the draft 4 and it was contained in the final letter and I didn't tell 5 him to take it out. So I have to assume that by my lack of 6 action, or inaction, that I told him so. 7 So, I'm accepting that. 8 Q: Let me suggest to you, Mr. Jakobek, that 9 you told your lawyer, not only that you did not attend on the 10 Philadelphia trip, but that you also told, your lawyer, Mr. 11 Roebuck, that you will repeat that under oath when you give 12 evidence at this Inquiry, isn't that true? 13 A: I'm -- I'm as I said earlier, by virtue of 14 not having deleted it from the letters and by virtue of 15 telling him that I wasn't in Philadelphia, I can't argue with 16 you. 17 18 (BRIEF PAUSE) 19 20 Q: In your evidence on May the 15th, you 21 stated that when you received the copy of the letter to the 22 Toronto Star, dated January 27th, 2003, you said something to 23 the effect, oh my God, stop everything that you're doing in 24 relation to Mr. Roebuck. 25 That's what you testified your reaction was

1 when you saw this letter. Now, let me preface that by 2 saying, at that time you testified you hadn't seen the 3 letter, prior to it going out. 4 MR. LORNE HONICKMAN: Sorry, can we just have 5 the exact page, just for reference? 6 MR. RONALD MANES: 212, lines 4 to 14. 7 8 (BRIEF PAUSE) 9 10 MR. LORNE HONICKMAN: Thank you. 11 12 (BRIEF PAUSE) 13 14 MR. RONALD MANES: Let me just read this into 15 the transcript. Starting at 211, line 10: 16 MADAM COMMISSIONER: 11? 17 MR. RONALD MANES: Starting at page 211, 18 better start at line 6 Commissioner, and it will go over to 19 212, line 14. 20 21 CONTINUED BY MR. RONALD MANES: 22 Q: Question: "Though others tell a different 23 story [this is the end of the article], 24 though others tell a different story, could 25 you tell me, did you consider that specific

1 paragraph an inaccuracy that would be 2 addressed by your lawyer on your authority, 3 yes or no?" 4 Answer: "Not so much an inaccuracy, Mr. 5 Manes, it's just I took an exception to Mr. 6 James sitting there and trying me in the 7 press, when I didn't -- when I hadn't had a 8 chance to come here. That was really what 9 it was, right? You know, at the end of the 10 day, this guy is saying, was he on a plane, 11 or wasn't he on a plane and others are 12 saying, yes, et cetera. It's all innuendo. 13 And whether it's true or not, there were 14 other issues that he was writing about, you 15 know, I'm frequently entertained because 16 you made that statement to the Mayor and 17 quite frankly, this was in the paper every 18 day, all the time, and these people weren't 19 willing to say, okay, you know what, not 20 all evidence that's in front of the Inquiry 21 is correct. That's the Inquiry goes along 22 and interviews people to find out what is 23 correct and isn't correct and no one was 24 giving me that benefit of the doubt and 25 again, I'll say to you, Madam Commissioner,

1 I don't say these things as a justification 2 for saying something that is not true. I 3 say something that wasn't --" 4 MADAM COMMISSIONER: I said. 5 6 CONTINUED BY MR. RONALD MANES: 7 Q: "I said something that wasn't true. It 8 caused a chain of events. It even, for all 9 intents and purposes, caused this letter 10 and I don't know how many times to say you 11 regret saying it and how many times you -- 12 you say you wish -- you say I'm sorry I 13 said, but the reality was when I got this 14 letter from my lawyer and I looked at it 15 and I saw that part and I saw this part 16 here that said, you know, you're going to, 17 for all intents and purposes, sue the Star, 18 I'm thinking, oh my god, what are we doing 19 here and I -- I called my solicitor to say, 20 please stop everything you're doing." 21 Did Mr. Roebuck continue to act for you on 22 your behalf after he sent the letter? 23 A: Yes. 24 Q: And did Mr. Roebuck's termination -- Mr. 25 Roebuck's termination of his retainer with you have anything

1 whatsoever to do with his sending this January 27th, 2003 2 letter? 3 A: No. 4 Q: At all times, the letter that Mr. Roebuck 5 sent on your behalf was authorized both as to the sending of 6 the letter and as to the contents and as to the precise 7 wording in the letter? 8 A: Yes, I take responsibility for that, yes. 9 Q: You take responsibility but -- 10 A: Mr. Manes, I'm -- 11 Q: -- you're not clear that -- 12 A: I'm -- 13 Q: -- you authorized it? 14 A: I'm -- I'm learning painfully here to be 15 very careful of my words, otherwise I offend somebody or 16 something but my answer to you is yes. Just -- 17 Q: And in all this, then, you say here that 18 Mr. Roebuck acted properly at all times in following your 19 instructions? 20 A: He is an honourable and decent person and 21 yes, he followed my instructions. 22 23 (BRIEF PAUSE) 24 25 Q: I'm sorry for that pause, Commissioner.

1 This had to do with the statements that Mr. Jakobek made with 2 respect to Mr. Peerenboom on the last occasion that he gave 3 evidence and Mr. Gold had indicated that Mr. Jakobek wanted 4 to say something about three (3) areas of that -- of that 5 statement. Is that right, Mr. Jakobek? 6 A: Yes. 7 Q: All right. Those areas -- what three (3) 8 areas, sir, do you want to comment on in terms of what you 9 said regarding Mr. Peerenboom? 10 A: Well, I think the first one is just that I 11 didn't want to make a derogatory or defamatory remark when I 12 said to you specifically, Madam Commissioner, about you 13 wouldn't want to know him. I said it in jest. I made a few 14 jests that day and I'm -- that was one of them and I regret 15 it because I really shouldn't have said that. 16 The second one was that when -- when I 17 specifically recalled him calling me and -- and or me calling 18 him, I -- now, at this point I've got to -- I don't have it 19 in front of me but we spoke and he had asked me -- or I had 20 asked him what I owed him for the trip and he had said 21 nothing and in the same conversation, he talked about my 22 playoff tickets and he really wanted those playoff tickets 23 and I said I would give him those playoff tickets. 24 And that it -- I believed that as usual he 25 would and did pay me the face value later on for those

1 tickets, face value for them, later on. 2 And the third thing I wanted to clarify was, I 3 think the first one (1) was, I just didn't want to make a 4 derogatory statement about the man. 5 MR. ALAN GOLD: First one (1) wasn't -- it was 6 just to make clear, as he said the other day, that any idea 7 about who was behind the flight to Philadelphia was his 8 option, that's all. 9 MADAM COMMISSIONER: Oh -- 10 THE WITNESS: If but -- I think -- that's 11 already been clarified right? You know, someone invites you 12 and you assume it, that's -- 13 MADAM COMMISSIONER: All right. Now, just 14 with respect to these playoff tickets, you said that you 15 believe he did, as usual pay you full face value for them. 16 Do you know whether he did or not? Or -- 17 THE WITNESS: Well, I believe he did, yes. 18 Yes, I believe he did. He has a thing about things like 19 that. So, I'm -- 20 MADAM COMMISSIONER: Okay. 21 THE WITNESS: -- very, very sure that he did. 22 These were not the only tickets he's purchased from me 23 before. 24 25 (BRIEF PAUSE)

1 2 CONTINUED BY MR. RONALD MANES: 3 Q: Now, you say this morning that, in effect, 4 you apologize for any derogatory statement you would have 5 made about the man, meaning about Mr. Peerenboom? 6 A: Correct. 7 Q: Mr. Peerenboom said in his sworn affidavit 8 that has been filed with the Commission -- 9 MADAM COMMISSIONER: Would you like Mr. 10 Jakobek to have a copy of that? 11 THE WITNESS: It's in the Tab somewhere, 12 right? 13 MADAM COMMISSIONER: I don't think so. It was 14 made a separate exhibit. 15 16 (BRIEF PAUSE) 17 18 MADAM COMMISSIONER: What number is that by 19 the way, do we have a -- 20 MS. LINDA ROTHSTEIN: I have it as Exhibit 34, 21 Commissioner. 22 MADAM COMMISSIONER: Thank you. Okay. 23 MR. RONALD MANES: Let me repeat that again. 24 Mr. Jakobek says in paragraph six (6) of this sworn 25 affidavit --

1 MR. ALAN GOLD: No, Mr. Peerenboom -- 2 3 CONTINUED BY MR. RONALD MANES: 4 Q: Mr. Peerenboom says in paragraph six (6) 5 of this sworn affidavit: 6 "That in or about early to mid-November 7 2002, I spoke with Mr. Jakobek. He asked 8 me for my recollection. I told him that I 9 had no clear recollection of whether or not 10 he was on the flight or at the game. Mr. 11 Jakobek told me, that he was not on the 12 flight and at the game." 13 I examined you about this paragraph in earlier 14 testimony, Mr. Jakobek, and you stated that it was not true 15 that you told Mr. Peerenboom, that you were not on the flight 16 and at the game. 17 Do you stand by that today? 18 A: Yes. Yes, I do. 19 Q: All right. 20 21 (BRIEF PAUSE) 22 23 MR. RONALD MANES: Commissioner, those are all 24 my questions for this witness. 25 MADAM COMMISSIONER: Okay.

1 THE WITNESS: Do you want that back? 2 MADAM COMMISSIONER: You can just leave it 3 there for now, Mr. Jakobek. 4 All right. Do we have any agreement as to who 5 is going next? Counsel? 6 MS. BAY RYLEY: Yes, I'm going to go next. 7 MADAM COMMISSIONER: Ms. Ryley, all right. 8 This is Bay Ryley, and she's the lawyer for 9 Lana Viinamae. 10 THE WITNESS: Okay. 11 MADAM COMMISSIONER: She's going to be asking 12 you questions now. 13 14 (BRIEF PAUSE) 15 16 THE WITNESS: Thank you, Mr. Manes. 17 18 (BRIEF PAUSE) 19 20 CROSS-EXAMINATION BY MS. BAY RYLEY: 21 Q: Good morning, Mr. Jakobek. 22 A: Good morning, ma'am. 23 Q: If you could please turn to Tab 81 of 24 Volume 2. 25 A: Yes, ma'am?

1 Q: There's no Begdoc number for this 2 document. Okay and if you could please review the -- just -- 3 it says Budget Advisory Committee at the top and this was 4 taken from the City of Toronto's website. If you could just 5 take a moment to read the -- I guess, the first paragraph and 6 those two (2) bullets about what the Budget Advisory 7 Committee does. 8 A: Yes. 9 Q: And I'll just read what it says here, is 10 that: 11 "The Budget Advisory Committee assists the 12 Policy and Finance Committee by 13 coordinating the preparation of the annual 14 capital and operating budgets and reviewing 15 other matters having a significant impact 16 on the future budget." 17 Is this -- is this a fair and accurate 18 description of the role of the Budget Advisory Committee 19 currently and during the time that you were the Chair of the 20 Committee? 21 A: The page that you're reading from is the 22 current page as opposed to a previous page. I absolutely 23 agree with the first point, which is the coordination and 24 preparation of the annual capital and operating budget. 25 On the second point, I'm not sure. It says:

1 "Reviewing other matters having significant 2 impact on the future budget." 3 I believe that the only matters that it can 4 deal with with respect to that are matters that are 5 specifically referred by the Policy and Finance Committee and 6 -- and I -- and I'm taking that from the restructuring of the 7 Committee that was done in May of 1999 which I referred to in 8 previous testimony. That's my understanding of it. 9 Q: Okay and just to clarify, you were the -- 10 you were the Chair of the Budget Advisory Committee from 11 about November 1991 until November of 2000? 12 A: No. No -- November of -- oh, sorry. 13 November of '91 I was. Then I was again in November of '94 14 and then in November of '97, which is more relevant, in the 15 amalgamated City I think it was December or January the 3rd 16 of '98 that we actually assumed office or whatever and I 17 became the Budget Chair on, I think, January the 3rd and then 18 I -- I actually resigned from the position. I -- it was 19 either April the 3rd or April the 9th of 2000. I actually 20 resigned from it before I finished my term with Council in 21 order to do my Masters program. 22 Q: And how -- during the time that you -- 23 that you were the Budget Chief or the Chair of the Budget 24 Advisory Committee, how would you describe the role of that 25 position?

1 A: Chairing the meeting. Making sure that 2 the things got done. 3 Q: And if we could turn to Tab 80, this is 4 also taken from the City's website and there's no Begdoc 5 number as of yet. This is about the Policy and Finance 6 Committee. As -- if you could just take a moment to review 7 the first three (3) paragraphs there. 8 9 (BRIEF PAUSE) 10 11 A: Yes. 12 Q: So, as Chair of the Budget Advisory 13 Committee, you also sat on the Strategic Policies and 14 Priorities Committee and its successor, the Policy and 15 Finance Committee? 16 A: Correct. 17 Q: And is it the case that all Chairs of 18 committees of Council sit on the Policy and Finance 19 Committee? 20 A: I believe so. I -- 21 MADAM COMMISSIONER: Do all chairs of all 22 committees, did we say? 23 THE WITNESS: All -- 24 MS. BAY RYLEY: All chairs of all Committees 25 of Council.

1 THE WITNESS: Yeah, you may -- I think you may 2 be correct. I'm trying to remember now, yeah. 3 MS. BAY RYLEY: And if you look on this page 4 here under members -- 5 MADAM COMMISSIONER: Sorry, Ms. Ryley, are you 6 saying, do all the Chairs of all Committees of Council sit on 7 the Budget Committee, or on P&F? 8 MS. BAY RYLEY: On -- on the Policy and 9 Finance. 10 MADAM COMMISSIONER: Okay, thank you. 11 12 CONTINUED BY MR. BAY RYLEY: 13 Q: And if you look under the current members, 14 I see that the -- the Mayor and the Deputy Mayor as well as 15 eight (8) other Councillors sit on -- on the Committee, on 16 the Policy and Finance Committee. And was that the makeup of 17 the Committee during the time that you were on Policy and 18 Finance -- 19 A: No, I think the Policy and Finance 20 Committee was quite different in composition than what I'm 21 looking at here. This is a current snapshot. 22 Q: Sorry, I mean -- I meant by the numbers of 23 Councillors and the fact that the Mayor and the Deputy Mayor 24 are on the Committee, I didn't mean the same names? 25 A: I'm afraid I'm going to have to tell you

1 that I have not paid attention to any restructuring or 2 numbers on Committees for the last two (2) years, so I 3 honestly cannot tell you whether it's the same compliment or 4 whatever. It -- it can be altered by the Striking Committee, 5 so I don't know. 6 And as you mentioned about the Chairs of the 7 Committees, I'm not even sure that all the Chairs of all the 8 Committees are on it. So, I -- I couldn't tell you. 9 Q: Was the Mayor the Chair of the Committee 10 at the time that you were on the Policy and Finance 11 Committee? 12 A: Yes, he is the Chair by theory. In 13 practical he very seldom attended, or when he attended 14 usually Case Ootes Chaired the meeting. 15 Q: Okay, and I'm just -- I'm going to read 16 this role, what it says the role of the Policy and Finance 17 Committee is here. It says: 18 "It's responsible for setting financial 19 priorities and recommending the annual 20 budget. It monitors budget performances 21 and recommends in year changes to vary City 22 spending from the approved annual budget. 23 The -- the Budget Advisory Committee 24 assists the Policy and Finance Committee by 25 coordinating the preparation of the annual

1 capital and operating budget, and reviewing 2 other matters having a significant impact 3 on a future budget. 4 The Policy and Finance Committee, in 5 addition to the financial mandate noted 6 above, has responsibility for --" 7 And there's five (5) bullets there: 8 "The Corporate strategic plan, corporate 9 intergovernmental and international 10 activities, annual budgets of the City's 11 agencies, boards and commissions, tax 12 policies and matters cutting across 13 different departments and A B C's." 14 And is that a fair and accurate description of 15 the role of the Policy and Finance Committee during the time 16 that you sat on this Committee? 17 A: I believe so, with the -- with the 18 exception in the second paragraph of where it describes the 19 Budget Advisory Committee, I'm almost absolutely certain that 20 -- that the matters have to be referred from the -- I 21 believe, I -- I could be wrong, but I -- that's my 22 recollection. 23 Q: Sorry, the matters have to be referred? 24 A: I'm trying to think back to a report that 25 was written four (4) years ago, and -- and so I would just

1 suggest that when I say yes to this, I'm doing so because it 2 looks correct, and then specifically on that one (1) point 3 you have to go back and check. 4 Q: And then over to Tab 79? Again from the 5 City of Toronto's website, and there's no Begdoc as yet. And 6 just in the first sentence there is -- is: 7 "Committees of Council discussed budget, 8 service and administrative issues that are 9 then passed on to Council for debate and 10 final approval." 11 So, did the Policy and Finance Committee, as 12 well as the Budget Advisory Committee, would both be 13 considered Committees of Council? 14 A: Policy and Finance is considered a 15 Committee of Council, I believe Budget Committee is 16 considered to be a sub-committee or whatever, that refers 17 things to the Finance Committee, it's not a direct report. 18 Q: Okay. 19 A: Unless -- unless asked for. 20 Q: Okay, and the description here in this 21 first sentence, is that an accurate description of the role 22 of Committees of Council? 23 A: Yes, it sounds like it to me, yes. 24 Q: So, Committees of Council pass on reports 25 to Council, Council may debate issues raised in the reports

1 and -- and can then approve -- Council can then approve the 2 report? 3 A: Approve, not approve, send back, amend. 4 Q: Okay, if you turn to Volume I, Tab 12. 5 6 (BRIEF PAUSE) 7 8 Q: It's Begdoc 31661 and it's a report to the 9 Budget Advisory Committee from the Chief Administrative 10 Officer who was Mike Garrett at the time and this is -- the 11 subject is "Non-Program 2000 Preliminary Operating Budget". 12 Can you just -- if you could please just review the purpose 13 there in the first paragraph. 14 A: Yes, ma'am. 15 Q: This report would have been distributed to 16 all Councillors after it was discussed at Committee? 17 A: Yes. 18 Q: And the -- the purpose is that: 19 "The report provides the Budget Advisory 20 Committee with the 2000 operating budgets 21 for the following non-program items: " 22 Non-program and it lists the non-program 23 items. The only one we're going to look at is corporate and 24 -- capital and corporate financing but it also reports on 25 non-program expenditures and non-program revenues.

1 Non-program means the item is not ascribed to 2 any particular department's budget? 3 A: I believe so. 4 Q: And it's the Finance Department that 5 reports on non-program items? 6 A: I think they take carriage of it, yes. 7 Q: And if you could turn over to page -- the 8 second page there and if you could review the last paragraph 9 and over to the top of Page 3. 10 11 (BRIEF PAUSE) 12 13 A: Yes. 14 Q: Okay and the part I want to talk about was 15 the -- was the very last sentence. In particular, the last 16 sentence on Page 2 that says: 17 "In addition, when Council approved the 18 2000 capital budget, $2.5 million for 19 computer maintenance, contracts, licenses 20 and related costs was identified as a 2000 21 operating budget pressure. These costs are 22 included in this budget to be financed 23 corporately. The total budget for computer 24 leases in the recommended 2000 operating 25 budget is 16.5 million."

1 So does "financed corporately" -- does that 2 mean finance through the non-program budget, which is an 3 operating budget? 4 A: I'm not sure of your question. 5 Q: What does "financed corporately" mean in 6 the sentence on the top of Page 3? 7 A: Oh, I -- I -- the sentence on the top of 8 Page 3. Where are you reading from, ma'am? Sorry. 9 Q: The -- the first sentence. 10 "These costs are included in this budget to 11 be financed corporately." 12 A: Oh, oh. So they're not applicable to an 13 individual department. 14 Q: That's what "financed corporately" means? 15 A: Right. 16 Q: Okay. 17 A: I -- well, this -- this wording was always 18 tricky. So "budget to be financed corporately"; so, 19 sometimes if there's an overall corporate cost, maybe a 20 benefit change for employees, in this case leasing, then 21 those costs are grabbed and they are corporately dealt with 22 but I think they also get split up and applied individually 23 to the different departments. So if the Recreational 24 Department got 4 percent of that cost, then its budget would 25 be adjusted by 4 percent of that, in most cases.

1 I'm not sure that that's the total application 2 of this, but from what I read, that's what it means. 3 Financed corporately, in other words, we finance it as a -- 4 as a corporation, and then we break up the costs afterwards. 5 Q: And this would be since the -- the end of 6 the page 2, these were identified as the 2000 operating 7 budget pressure, so these -- these costs, when it says 8 they're to be financed corporately, would mean they'd be 9 financed through an operating budget; is that right? 10 A: Well, when I take it from that language, 11 because I've seen it before, when I take it from that 12 language is that we predicted these costs and here they are. 13 In other words, you know, the total budget -- it says: 14 "That these costs are included --" 15 Or, where does it say about the pressure here? 16 Yeah, it says: 17 "Related cost was identified in the 2000 18 operating budget." 19 On the bottom of page 2. It says: 20 "Cost was identified in 2000 operating 21 budget pressure." 22 In other words, it's something you expected. 23 Do you follow what I'm saying? 24 MADAM COMMISSIONER: I do. 25

1 CONTINUED BY MS. BAY RYLEY: 2 Q: In -- in the -- these are -- this is about 3 the operating budget, it's not about a capital budget; 4 correct? In this -- in this -- this sentence that we're 5 looking at? 6 A: It's an operating cost. 7 Q: Yes. 8 A: Which was expected in the operating budget 9 to be that amount or whatever, in 2000. 10 Q: Okay. Now, on to, in terms of what was 11 expected, there's -- it refers here to -- on the bottom of 12 page 2: 13 "$2.5 million for computer maintenance, 14 contracts, licenses and related costs. Were 15 identified as an operating budget 16 pressure." 17 Is -- a pressure means -- operating pressure 18 means over budget doesn't it? 19 A: No. I'm looking for a simplistic 20 response, so, something that I can give you. 21 So, in -- in the year that this was approved, 22 you knew you had future costs as a result, and so those costs 23 were identified as a future pressure, a future budgetary 24 issue, as opposed to necessarily over budget. 25 Just because it's identified as a budget -- a

1 future budget pressure, it doesn't mean it's over budget. 2 Over budget is a -- is a totally different wording. What 3 they're saying is you have got these capital costs of $2.5 4 million for computer maintenance contracts, licenses and 5 related costs, which were identified in your 2000 operating 6 budget as a pressure. 7 So, I don't want to not agree with you, but 8 you might make the argument, well, that means that you 9 expected it to be over budget, and my answer to you is, not 10 necessarily, it just means that you -- you expect that 11 pressure. How you address it is another thing. 12 Q: When it says on the -- on the top of page 13 3, the last sentence of the first paragraph: 14 "And the total budget for computer leases 15 in the recommended 2000 operating budget is 16 $16.5 million." 17 Now, does that -- that would include -- 18 they've added the 2.5 million of the operating pressure? 19 A: I'm assuming that they've added the six 20 (6) to the eight (8) and the two point five (2.5) and come up 21 with sixteen point five (16.5). 22 Q: So, the two point five (2.5) is -- is for 23 the maintenance contracts, licenses and related costs, have 24 been added to what the operating budget was originally? 25 A: That's how I read this.

1 Q: So the operating budget here has been 2 increased by 2.5 million? 3 A: Not necessarily, I -- see, I'm -- I'm 4 trying to give you my read of it, and my read of it may or 5 may not be correct, it's just what I would expect. 6 And my read of it is; we're identifying the 7 fact that you approve something, we're identifying these are 8 the costs to date, we're telling you that we expected a 9 budget pressure in the next year, and so we're reporting on 10 it and here are the actions you need to take. 11 Q: But that -- the two point five (2.5) was 12 an amount that was not originally -- it wasn't specifically 13 foreseen, the amount? 14 A: No, ma'am, I don't read it that way. I'm 15 sorry, I -- I -- I don't read that that way. I don't read 16 anything here that says we've had an unexpected, or we've had 17 a problematic $2.5 million over and above the budget. I -- I 18 don't read it that way. That may have been the case, I have 19 no reason not to know. 20 But -- but I -- I don't read this one (1) that 21 way. This one (1) reads to me as you approved this thing in 22 July of '99, you -- you're reallocating 6 million here, 8 23 million there, you've got a $2.5 million cost, which was 24 identified previously for the next year's budget, and the 25 total is 16.5 million. It doesn't tell me anything more than

1 that. 2 Q: Okay. If you could go to Tab 69 of Volume 3 II. 4 MADAM COMMISSIONER: Volume II? 5 MS. BAY RYLEY: The other volume, yeah. 6 THE WITNESS: Oh, it's a different volume? 7 MADAM COMMISSIONER: Yeah. 8 9 (BRIEF PAUSE) 10 11 CONTINUED BY MS. BAY RYLEY: 12 Q: This is a -- it's quite faint, but it's 13 Begdoc 06378, it's the September 14th, 2000 report to the 14 Policy and Finance Committee from the Chief Financial Officer 15 and Treasurer, and the subject is December '99 -- 1999 16 Operating Variance, Supplementary Report. 17 If you could please just review the purpose 18 there at -- at the top of the page? 19 A: Yes. 20 Q: As well -- as well as the recommendations? 21 A: Yes. 22 Q: So, this report would have gone to Council 23 after it was discussed at Policy and Finance Committee? 24 A: Correct. 25 Q: And as --

1 MADAM COMMISSIONER: Would it have been -- 2 THE WITNESS: Well, sorry -- 3 MADAM COMMISSIONER: -- this has been 4 discussed then -- 5 THE WITNESS: No -- 6 MADAM COMMISSIONER: -- it was just for 7 information? 8 THE WITNESS: -- hold on a second, hold on a 9 second, hold on a second. 10 MADAM COMMISSIONER: Okay. 11 THE WITNESS: Because no action is actually 12 required or requested, it's just for information purposes, it 13 may not have gone to Council, I don't know, I don't know. 14 15 CONTINUED BY MS. BAY RYLEY: 16 Q: So, what does "Received for information" 17 mean? 18 A: It means the report is received by the 19 Committee. Now, generally speaking, reports received by a 20 Committee means that's it, we received the report, it's in 21 the Committee notes and that's the end of it. 22 Sometimes Committee reports that are received, 23 go to Council. I can't give you specifics on how and when, I 24 just know that sometimes they have, but generally speaking, 25 this is a report that was sent on budget variances in a

1 number of areas, which was for our information and receipt. 2 Q: Okay. Under -- under the purpose there, 3 in response to a request from Council, the CFO and Treasurer, 4 Wanda Liczyk, is reporting back on, among other things, the 5 factors behind the 1999 unbudgeted expenditures for computer 6 leasing costs, which amounted to $1.4 million? 7 A: Hmm hmm. 8 Q: And if you could please review under -- on 9 page 3, which is Begdoc 06380, the paragraph under "Computer 10 leasing costs". 11 12 (BRIEF PAUSE) 13 14 A: Yes, I've read the paragraph. 15 Q: So, it says -- this is a -- so the first 16 third there, that, Council granted approval to spend up to $6 17 million in 1999, but actual expenditures were only $1.4 18 million. So that actual expenditures were less than what was 19 actually -- what was budgeted for in 1999? 20 A: Correct, that's what it says. 21 Q: And could the unused -- the unused portion 22 from the 1999 budget could be incurred in 2000? 23 24 (BRIEF PAUSE) 25

1 MADAM COMMISSIONER: You mean without 2 approval? Without further approval? 3 THE WITNESS: I -- you know what, I have to 4 tell you that's a tough question for me to answer because the 5 general rule of thumb was when the year ends, if we have 6 money sitting in the bank we take it back, henceforth people 7 would, generally speaking, spend it at all costs -- at all 8 times. 9 So -- but I'm -- I'm going to assume that if 10 they budgeted this as a total item corporately in that if 11 they had a shortfall in one year and they had an incurred 12 cost the next year, that it would carry through and it would 13 be done so under a general authority or something of that 14 nature. 15 16 CONTINUED BY MS. BAY RYLEY: 17 Q: Now, the last two (2) sentences there 18 where these seem to refer to the last document that we were 19 just looking at where it says that: 20 "For 2000, computer leasing costs are 21 budgeted at $16.5 million gross and this is 22 included as part of capital and corporate 23 finance -- financing as detailed in the 24 2000 operating budget approved by Council." 25 So if you recall the last document that we

1 were just on about -- that referred to $16.5 million detailed 2 in the 2000 operating budget, is that the same -- that's the 3 same -- 4 A: I don't see the word gross in Page 2 of 5 the first document. Gross and net are two (2) different 6 things. 7 MADAM COMMISSIONER: It's on Page 3? Are you 8 talking -- 9 THE WITNESS: I'm going back to the original 10 document that I was being questioned on in the first, I think 11 it was 12 -- 12 MS. BAY RYLEY: It was Tab -- Volume I, Tab 13 12. 14 THE WITNESS: Yeah. The recommendations have 15 gross figures but in the text of the report where you're 16 trying or where you want me to compare in the bottom of page 17 2. In that paragraph, I don't see the word gross in those 18 terminologies, like the 2.5 and 16. -- maybe it's on the next 19 page. Hang on. 20 MS. BAY RYLEY: I don't see -- 21 THE WITNESS: No. 22 MS. BAY RYLEY: -- the word gross. 23 24 CONTINUED BY MS. BAY RYLEY: 25 Q: But it is the same -- they're referring to

1 the same -- those reports are referring to the $16.5 million 2 as being in the 2000 operating budget; the same figure, 16.5 3 million, correct? 4 A: It may be. I don't -- I don't -- 5 Q: It says -- the -- one the last document we 6 were just previously on which is Tab 12, Volume I: 7 "The total --" 8 The top of page 3: 9 "The total budget for computer leases in 10 the recommended 2000 operating budget is 16.5 --" 11 And then the document that we then moved to, 12 Tab 69 of Volume II, again referenced to -- 13 MADAM COMMISSIONER: Ms. Ryley, you're losing 14 me. 15 MS. BAY RYLEY: Okay. What -- 16 MADAM COMMISSIONER: What point are you 17 making? 18 19 CONTINUED BY MS. BAY RYLEY: 20 Q: I'm just trying to establish that it -- 21 whether it's gross or net in that year -- it's important that 22 you're saying those are -- those could be very different 23 amounts but in these reports, there's -- both reports refer 24 to $16.5 million in the 2000 operating budget? 25 A: I believe both were -- are suggesting that

1 amount, yes. 2 Q: Okay. The last sentence of that paragraph 3 of page 3 of the Tab 69: 4 "Actual charges for 2000 will continue -- 5 will continue to be incurred and will be 6 reported as part of capital and corporate 7 financing." 8 What does continue to be incurred mean to you 9 in that -- 10 A: Well, it sounds like there's -- there are 11 more expenditures than 16.5 million and that they will report 12 as they go along. 13 Q: So there will be further expenditures in 14 the area of computer hardware and software? 15 A: It's not complete. It's not finished. 16 Q: Okay. So there could be further 17 acquisitions of hardware and software that will be added? 18 A: Well, I wouldn't say that. I wouldn't say 19 that, ma'am. I would say that -- I would just simply say 20 that was this tells me is that the -- the budget at this 21 point is, generally speaking, on track. There are some 22 variations, we will monitor them. There are more 23 expenditures, we will monitor them and we will report on it. 24 Q: So there will be more expenditures -- 25 A: Of whatever.

1 Q: -- for computer leasing -- 2 A: Of whatever, yeah. I mean, I -- I -- 3 look, obviously I'm reading this now with today's knowledge. 4 Okay? So what I'm saying to you is if you're asking me the 5 question, does this paragraph suggest that there's more 6 expenditures yet to come out of 16.5 million, the answer is 7 yes. 8 If you're asking me, are you expecting more 9 expenditures in specific areas about -- I don't know. 10 Q: So the additional expenditures beyond the 11 16.5 million? 12 A: Right -- 13 Q: Okay. 14 A: -- as opposed to forty-three (43). 15 Q: And again, it says that those -- those 16 expenditures will be reported as part of capital and 17 corporate financing, and we've gone over before that that 18 would be an operating budget expense? 19 A: Generally. 20 Q: Okay. Volume II, Tab 75. I can't read 21 the Begdoc number here, I don't now if anyone else has it. 22 MADAM COMMISSIONER: It's hard to see. 23 MS. BAY RYLEY: I think it's 02306, I believe. 24 25 CONTINUED BY MS. BAY RYLEY:

1 Q: This is October 14th, 1998 report to City 2 Council from the CAO, the CFO and Treasurer, and the 3 Commissioner of Corporate Services and the CAO at that time 4 was Mike Garrett? 5 A: '98, yes. 6 Q: The CFO and Treasurer was Wanda Liczyk? 7 A: Yes. 8 Q: And the Commissioner of Corporate services 9 at that time was Margaret Rodrigues? 10 A: I can't remember when Margaret left, so if 11 you say so, I'll say, yes. 12 Q: I'm just looking to the end of the report. 13 And I don't see her name, but I believe that she was the 14 Commissioner of Corporate Services at that time. 15 A: I don't -- 16 Q: Could you please -- 17 A: -- I don't know then, will be my answer. 18 Q: Can you please review the -- the purpose 19 section? There's about -- a number of bullets there. 20 21 (BRIEF PAUSE) 22 23 A: Yes. 24 Q: So, this -- this report is a request 25 following up on a request from Council, for information --

1 information that was requested and -- and there's a number of 2 -- of items listed there, I'm not going to review each one 3 (1), but just point out that they included bullet number 3: 4 "The plan budget required to ensure 2000 5 readiness for each project." 6 The next bullet: 7 "The current status of each project." 8 And then the second last bullet: 9 "The amount and source of funding for the 10 Year 2000 Program." 11 And then -- and then I wanted to ask you about 12 just below that, it says: 13 "The report also provides the status on the 14 following items, recommended in the Year 15 2000 action plan, approved by Council in 16 July." 17 And the first one (1) is: 18 "The assignment of a Member of Council to 19 the Year 2000 Project." 20 A: Correct. 21 Q: And I just wanted to take you to a couple 22 references to that Member of Council and then ask you, on 23 page 6, the first bullet there says: 24 "Councillor O'Brien has been appointed to 25 represent Council on the Steering

1 Committee, with the Commissioner of 2 Corporate Services and the Executive 3 Director of Information and Technology. 4 The Steering Committee reports to the 5 Strategic Priorities Committee on a regular 6 basis." 7 And then over on the next page 7. The last 8 paragraph refers to: 9 "The Mayor's designate and Council 10 representative --" 11 It's three (3) lines up from the bottom. 12 Councillor Dick O'Brien and as the Mayor's designate and 13 Council representative on the Y2K Steering Committee, 14 Councillor O'Brien would have been responsible for being up 15 to date on the progress of Y2K? 16 A: Yes, absolutely. 17 Q: In order to report to Council and also to 18 the Mayor? 19 A: Right. 20 Q: So, he would have been Council's eyes and 21 ears on the Steering Committee? 22 A: Yes, this committee was set up because of 23 the fact that it was just too big and too quick an item for 24 us to deal with in the regular process but th -- the Budget 25 Committee, at the time, was absolutely inundated with

1 amalgamation issues and Y2K came around the corner as a $153 2 or some odd million expenditure. 3 And I -- I think that -- this -- this -- 4 basically, what this says and what this follows up on is the 5 fact that we set up a separate committee to review 6 everything. We had Mr. O'Brien as the -- as the chair of the 7 thing or whatever and all the different staff and I think 8 audit was included there or something and they were supposed 9 to monitor, look after and give us progress reports. 10 Q: And on that issue, progress report, on the 11 same page, Page 7. The second last paragraph, it says: 12 "The year -- the Year 2000 Project is a 13 standing agenda item for the senior 14 management team and for the Strategic 15 Policies and Priorities Committee. A 16 progress report and a budget report will be 17 forwarded to both meetings on a monthly 18 basis with a quarterly report to Council." 19 So the members of the Strategic Priorities and 20 Policies Committee would have received a progress report and 21 a budget report from the Y2K project on a monthly basis? 22 A: Whether they did or not, I don't know. I 23 mean, what this report says is that they should but like in 24 many reports, sometimes it does, sometimes it doesn't. 25 Q: I think it's stronger than that they

1 should, it says that it -- a progress report will be 2 forwarded to both meetings. 3 A: I -- I personally am telling you as 4 someone who has read many of these reports. Don't -- you 5 know, we assume that that will happen and it should happen 6 but sometimes reports get left off or sometimes it can't be 7 done or whatever. I -- again, without offending anybody, I'm 8 saying that as a practical course, right? 9 Q: Hmm hmm. 10 A: You have this thing and it says, you -- 11 you folks are going to report on a monthly basis. Things 12 happen and there's other priorities that get thrown at people 13 because of Council and sometimes it does or doesn't happen 14 and I don't know that we have a system in place that says, 15 here are all the outstanding reports that you've asked for 16 and here is the status of those. 17 I used to do that at budget a lot but there's 18 just so many report requests made that sometimes there are 19 those that may or may not occur on a regular basis but I 20 think, generally speaking, they did report back many times. 21 Q: All right and I'm -- I'm -- if we could 22 turn now to a couple examples where the Y2K Project did 23 report back. One is at Tab -- Volume II, Tab 76. Again, I 24 can't seem to read the Begdoc number here. This is a 25 November 30th, 1998 report and it's to the Strategic Policies

1 and Priorities Committee from the Commissioner of Corporate 2 Services and it says: 3 "Status report of year 2000 business 4 continuity plan" 5 So this -- this appears to be a status report 6 that was received by the members of the Strategic Policies 7 and Priorities Committee? 8 A: Correct. 9 Q: And the -- if you look under the purpose 10 there, some of the items that were discussed or given as an 11 update are the -- the status report on each -- of each 12 priority. One, year 2000 function, status report on all A B 13 C's and their state of readiness, status report on 14 expenditures and change requests. 15 A: Correct. 16 Q: What -- what is a change request? 17 A: A change request is usually done by a 18 department head and it's -- it's to say, look, you allocated 19 money for a new aerial, we've decided that we can repair the 20 aerial and we'd like to use the money instead for a new 21 pumper, which is a related matter or something of that nature 22 and we say okay. Sometimes it's a change of purpose as 23 opposed to a change of program. 24 Q: So it can be an increase or it could be 25 the decrease of an expenditure?

1 A: No, it's usually -- change of purpose is 2 usually a change for the existing approved expenditure. So 3 it's the difference between a larger gym and a swimming pool 4 as opposed to more money. More money would come out of your 5 budget variance report that you showed me earlier. 6 Q: So what's the difference between a change 7 request and a budget variance? 8 A: A change request usually means or would 9 normally, I believe, mean that you're not asking for more 10 money, you just want to apply it differently. That's -- 11 that's a recollection. 12 Q: Hmm hmm. Another example of -- of a 13 status report I'll just take you to quickly, is Tab 71. And 14 actually before -- before -- just on the same document at the 15 end, gives the contact for this report, the -- the one (1) at 16 Tab 76 as -- as being Lana Viinamae, and the report is signed 17 by Margaret Rodrigues, the Commissioner of Corporate 18 Services? 19 A: Right. 20 Q: Okay, onto Tab 71. 21 MADAM COMMISSIONER: And the Begdoc on that 22 other one (1) was 01257. 23 MS. BAY RYLEY: Thank you. All right. 24 MADAM COMMISSIONER: Okay. 25

1 CONTINUED BY MS. BAY RYLEY: 2 Q: Tab 71 I can read, is -- is Begdoc 01323, 3 February 9th, 1999, report to Strategic Policies and 4 Priorities Committee, again from the Commissioner of 5 Corporate Services. The subject is: 6 "Year 2000 Priority One (1) Business 7 Functions, Status Report and Identification 8 of Priority Two (2) and Three (3) Business 9 Functions." 10 So, this appears to be another -- another 11 status report sent from the Year 2000 Project to the 12 Strategic Policies and Priorities Committee? 13 A: Yes. 14 Q: Again, there's a list of -- of 15 information, it outlines under the purpose the types of 16 information included in the report, the second last bullet 17 refers to: 18 "Status Report on Expenditures for Priority 19 One (1) Year 2000 Functions." 20 And if you turn to page 01328, under -- which 21 relates to that bullet -- 22 MADAM COMMISSIONER: Are you there? 23 THE WITNESS: No. 24 MADAM COMMISSIONER: It's up at the very top. 25 MS. BAY RYLEY: Sorry.

1 MADAM COMMISSIONER: It says C0T001328, it's 2 quite faint. 3 THE WITNESS: What number and Tab am I in? 4 MADAM COMMISSIONER: We're still on Tab 71. 5 THE WITNESS: Hold on a second, I'll make sure 6 I'm in the right one (1). 7 MADAM COMMISSIONER: And the first few letters 8 at the top of the page are, "Allowed to continue in this" -- 9 THE WITNESS: 01328. 10 MADAM COMMISSIONER: Right. 11 THE WITNESS: Got it. 12 MADAM COMMISSIONER: Okay. 13 THE WITNESS: Thank you. 14 MADAM COMMISSIONER: You're welcome. 15 16 CONTINUED BY MS. BAY RYLEY: 17 Q: If you can see there the heading: 18 "Status Report on the City of Toronto's 19 Expenditures." 20 A: Yes. 21 Q: It says: 22 "Attached is a status report on the $149.6 23 million allocated to the Y2K Project, to 24 remedy critical one (1) business 25 functions."

1 A: Yes. 2 Q: And if you turn to the last page in this 3 Tab, which is a spreadsheet, and it's entitled, 4 "City of Toronto Year 2000 Expenditures as 5 of January 31st, 1999", 6 Begdoc 01345. 7 So, this -- this particular status report 8 included this spreadsheet that outlines the Year 2000 9 expenditures as of that date? 10 A: In it's totality, yes. 11 Q: And if you look at the last three (3) 12 items, I guess except for the last one (1). Well, at the end 13 of the items, there's servers, network and desktop, do you 14 see that? 15 A: Hmm hmm. 16 Q: So, these would all be considered 17 Information and Technology items, they're hardware and 18 software? Servers? 19 A: The simple answer to say, yes. I'll say, 20 yes. 21 Q: These are all -- these items, servers, 22 network and desktop relate to Information and Technology? 23 A: Yes. 24 Q: And on the same theme of the status 25 report, Volume 2, Tab 74, Begdoc 01361. It's a February

1 15th, 1999 letter from the CAO, Mike Garrett -- Michael 2 Garrett, to Councillor Ila Bossons, if you could take a 3 minute to review this. 4 MADAM COMMISSIONER: Could you just spell that 5 please. 6 MS. BAY RYLEY: Sorry, Ila is I-L-A and 7 Bossons is B-O-S-S-O-N-S and it's the second paragraph that 8 I'm -- that I'd like to ask you about. 9 THE WITNESS: Yes? 10 11 CONTINUED BY MS. BAY RYLEY: 12 Q: So it says here that -- in the second 13 paragraph: 14 "The City will be launching the year 2000 15 site on the City of Toronto's web page." 16 And at the second sentence: 17 "All Council reports containing monthly 18 status reports of the City's Priority 1 19 business function are already on the City's 20 web page and an internet site is available 21 for City staff." 22 So Council reports that contain monthly status 23 reports from the Y2K project, such as the ones that we were 24 looking at, these were also, according to this, available on 25 the City's web page as well as the internet site?

1 A: Sure. 2 Q: So they'd be available to the public? 3 A: According to this. 4 Q: All right. To Tab 70, Volume II. 5 MADAM COMMISSIONER: Tab? 6 MS. BAY RYLEY: Sorry, 70? 7 MADAM COMMISSIONER: 70? 8 MS. BAY RYLEY: Tab 70. 9 10 CONTINUED BY MS. BAY RYLEY: 11 Q: Tab 70, Volume 2, Begdoc 13046. It's a 12 March 15th, 2001 report to the Budget Advisory Committee from 13 the Chief Financial Officer and Treasurer and the subject is 14 2001 operating budget, non-program expenditures and revenue 15 supplementary report. 16 A: I -- I -- 17 MADAM COMMISSIONER: It's 13046. 18 THE WITNESS: I just -- 19 MS. BAY RYLEY: Okay. 20 THE WITNESS: I would just like -- 21 MADAM COMMISSIONER: Yes. 22 THE WITNESS: -- to point out that by March 23 15th, 2001 I was not at City Hall. 24 MADAM COMMISSIONER: Okay. 25 THE WITNESS: Right. So if you're asking me

1 my opinion, I'm happy to give you whatever learned opinion I 2 had, but I wasn't there. 3 4 CONTINUED BY MS. BAY RYLEY: 5 Q: I was going to preface any questions I 6 have by acknowledging that you weren't there but I'm hoping 7 you can explain parts of this document. The purpose says: 8 "To review -- to provide further analysis 9 of the 2001 operating budget for the 10 various non-program expenditures and 11 revenues and to recommend amendments to 12 certain budget lines as a result of 2000 13 year end actuals." 14 What are year end actuals? What does year end 15 actuals mean? 16 A: Exactly what it says. You know, 17 regardless of what you budgeted, regardless of what you were 18 telling us, at the end of the day we -- we come to an actual 19 finalized amount that you expended. 20 Q: So you might have expended more, you might 21 have expended less? 22 A: Right. Very seldom the latter. 23 Q: And over to page 2, at the bottom of page 24 2. If you could please review under the -- under heading 4 25 about computer leases.

1 (BRIEF PAUSE) 2 3 A: Yes. 4 Q: In the first paragraph there it says: 5 "The increase in the 2001 budget relates to 6 software licenses for the existing and new 7 applications that were not included in the 8 2000 budget but which became necessary as 9 Y2K compliant hardware was implemented 10 throughout the City." 11 So is that increase in the 2001 budget then -- 12 or there was an increase to deal with -- with the cost of 13 licenses that were not included originally in the 2000 14 budget? 15 A: That's what it says to me. 16 Q: And over to page 3, the next page. Did 17 you have a chance to review over onto this next page? 18 A: I already read it. 19 Q: Okay. The costs of those additional 20 projects that weren't originally included in the budget was 21 $24.35 million? 22 A: Right. 23 Q: And so the leasing cost for that amount of 24 -- for those products were $5 million, it says and a -- which 25 increased the 2001 request to $18.5 million?

1 A: I don't see the word increase. Will bring 2 the 2001 request to 18.5 million. They're kind of odd here, 3 right? The cost of these software products totally 24.35 4 million with a total leasing cost of 5 million. Now, is the 5 5 million part of the 24.35 or is the 5 million in addition 6 to the 24.35? I don't know. 7 It just says bring the -- the 2001 request to 8 18.5 million. Well, if I take it that the 24.35 million 9 minus the 5 million in leasing cost because they were inside 10 that, then I don't come up with 18.5. If I say that the 11 24.35 million plus 5 million, it doesn't add up to 18.5. So 12 I -- I don't -- I'm not sure what that's supposed to mean. 13 Q: I don't think the -- you could -- it looks 14 like the cost of the products was 24.35. 15 A: But we're dealing with apples and oranges 16 here. We're dealing, on one hand, with the cost for the 17 software projects totally 24 million, which is the cost of 18 the actual stuff and then we're dealing with the issue of 19 leasing costs which are 5 million and they may or may not be 20 intertwined or they may not -- may or may not be the same 21 thing. I honestly don't know. 22 Q: You would expect if additional products of 23 24.35 million were acquired, that the leasing costs would 24 increase? 25

1 (BRIEF PAUSE) 2 3 MADAM COMMISSIONER: What's your -- 4 THE WITNESS: Do you want to phrase your 5 question again? I'll try to answer it. 6 7 CONTINUED BY MS. BAY RYLEY: 8 Q: Because there were additional software 9 products acquired, there was an acquisition of $24.35 10 million, you'd expect the leasing costs -- that would cause 11 an increase in the leasing costs? It wouldn't be reasonable 12 that it would cause a decrease in the leasing -- 13 A: I'll -- 14 Q: -- costs for that year? 15 A: I'll tell this and I'll be very careful 16 what I say. 17 Q: Hmm hmm. 18 A: I wasn't there. I didn't read this report 19 but I will read it to you and I'll tell you what it means to 20 me and I'll say with -- with -- without ego and all the rest 21 of that stuff that I probably read these better than most. 22 That's probably a fair way of putting it. 23 So when I read this thing, I -- I read that, 24 first and foremost, it's a report to the Budget Committee. 25 It's from the Treasurer. It's regarding non-program

1 expenditure and revenues. It is giving two (2) 2 recommendations that don't really say, and by the way, you 3 need these additional dollars, right? So I'm not -- no 4 lightbulb has gone off. Computer leases 2001 regular -- 5 recommended budget. So the 2001 recommended budget is 6 $18.551 million. It says: 7 "There's an increase in the 2001 budget 8 related to the software licenses for the 9 existing and new applications that were not 10 included in the 2000 budget but which 11 became necessary as Y2K compliant hardware 12 was implemented throughout the City." 13 So it's saying, here's the budget. It's -- 14 some of the items weren't included in 2000 because they were 15 needed afterwards. We found this later, like a budget 16 variance. 17 "Under the Year 2000 Project, 43 million in 18 hardware and software systems was acquired 19 with leasing totalling costs of 13.5 20 million budget in 2000 in order to support 21 that infrastructure, software licenses and 22 products such as office automation tools, 23 online reviewing --" 24 Da, da, da, da. 25 "-- required as part of the Y2K plan form.

1 The cost of these software products..." 2 So I can read it two (2) ways, I can either 3 read it that they're talking about the 43 million, or they're 4 talking about over and above the 43 million. 5 I could read it either one (1). 6 "The cost of these software projects total 7 24.35 million, with a total leasing cost of 8 5 million" 9 It doesn't say increased leasing costs, it 10 doesn't say -- it just says leasing costs, as I pointed out. 11 It could be in addition or below, bringing the 2001 request 12 to 18.5 million. That's what I read from it. 13 MADAM COMMISSIONER: Ms. Ryley, it's 11:30 14 now, so I don't -- how long -- how much longer do you think 15 you might be? 16 MS. BAY RYLEY: Maybe half an hour. 17 MADAM COMMISSIONER: Half an hour, okay. Do 18 you want to follow this up right now, or do you want to -- 19 MS. BAY RYLEY: No, I'll come back to it after 20 the break. 21 MADAM COMMISSIONER: After the break, all 22 right. And who is after Ms. Ryley? Mr. MacKenzie for Jim 23 Andrew, all right. Okay, we'll break until ten (10) to, see 24 you then. 25 THE REGISTRAR: Order, the Inquiry will recess

1 until ten to 12:00. 2 3 --- Upon recessing at 11:30 a.m. 4 --- Upon resuming at 11:50 a.m. 5 6 THE REGISTRAR: The Inquiry will resume. 7 Please be seated. 8 MADAM COMMISSIONER: Yes, Ms. Ryley. 9 MS. BAY RYLEY: If you could return to Tab -- 10 Volume II, Tab 68 and the beginning there, under the purpose. 11 THE WITNESS: Volume II, 68. 12 MADAM COMMISSIONER: Under purpose? 13 MS. BAY RYLEY: Under purpose. 14 THE WITNESS: This is -- 15 MADAM COMMISSIONER: I think -- am I in the 16 same spot? 17 MS. BAY RYLEY: Tab 70, Volume II. 18 MADAM COMMISSIONER: Oh. 19 THE WITNESS: Is this 30 -- 20 MS. BAY RYLEY: Sorry. 21 THE WITNESS: Is this 30 -- 22 MS. BAY RYLEY: I may have said the wrong tab. 23 THE WITNESS: Is this 35037 on the top? 24 MS. BAY RYLEY: I'm sorry. I may have 25 misspoke.

1 MADAM COMMISSIONER: I think she's saying Tab 2 70. Volume II, Tab 70. 3 THE WITNESS: 70. 70. 4 MS. BAY RYLEY: I apologize. Volume II, Tab 5 70. Begdoc 03 -- 03046. 6 MADAM COMMISSIONER: 13046. 7 MS. BAY RYLEY: 13046. 8 THE WITNESS: September 14th? 9 MS. BAY RYLEY: May 15th. 10 THE WITNESS: Oh, my gosh. 11 MADAM COMMISSIONER: Ms. Ryley? 12 THE WITNESS: Oh, okay. May 15th. 13 MADAM COMMISSIONER: May? 14 THE WITNESS: The next one over. 15 MS. BAY RYLEY: I'm not -- I'm not doing too 16 well right now. 17 THE WITNESS: Next Tab over. 18 MS. BAY RYLEY: March 15th, 2000. 19 THE WITNESS: Oh. 20 MADAM COMMISSIONER: March. 21 THE WITNESS: I'm sorry, yes. 22 23 CONTINUED BY MS. BAY RYLEY: 24 Q: And under the purpose -- this is to -- the 25 purpose is:

1 "To recommend amendments to certain budget 2 lines as a result of 2000 year end 3 actuals." 4 And you said earlier that actuals are rarely 5 less than the budgeted amount and are usually more. The 6 actual amount of expenditures. 7 A: It was a comment in jest but my general 8 opinion after the years that I've spent is that most people 9 try not to have actuals that are way below and I mean that in 10 the -- in the actual departmental budget as opposed to the 11 Finance Department, they like to have themselves under budget 12 but in the individual departments, they don't like to leave 13 too much money because we scoop it. 14 Q: And this report recommends an amendment to 15 the budget line as a result of what the actuals for 2000 are? 16 A: Yes, ma'am. I understand it that way. 17 Q: Okay. Turning over to page 2 under 18 heading 4 and the heading is, Computer leases 2001 19 recommended budget 18.551 million. 20 A: And if I may, by answering your question, 21 just remind all the people who are listening and I'm sorry to 22 refer it that way, but this my opinion on a March 15th, 2001 23 document when I was nowhere in the building. Okay, yes, I 24 see 18.5 million. 25 Q: And under the second paragraph there when

1 you made reference to the $43 million of hardware and 2 software, in that paragraph it says that with that amount of 3 hardware and software, the $43 million, the leasing costs 4 were 13.5 million budgeted in 2000. 5 A: Correct. 6 Q: Okay and then we were referring, over on 7 Page 3, to the reference to the total leasing costs of $5 8 million. That's just at the bottom of the first paragraph on 9 page -- 10 A: I see that, yes. 11 Q: So, returning to thirteen point five 12 (13.5), 13.5 million plus 5 million equals 18.5 million; 13 correct? 14 A: Yes. 15 Q: And it sounds like the heading here is a 16 little more precise, and says eighteen point five-five-one 17 (18.551). 18 So, you'd agree that the budget for 2000 was 19 13.5 million, with the addition of the 5 million required for 20 leasing costs, that brings the 2001 recommended budget to 21 $18.5 million? 22 A: I would have read it to say that it was a 23 total budget approval of 43 million, the actual in 2000 were 24 thirteen point five (13.5), and the ones in 2001 are eighteen 25 point five (18.5), yes.

1 Q: There's been an increase of $5 million 2 from the previous year? 3 A: It doesn't quite say that to me. It -- 4 I'm -- I'm trying to say to you that the cost of these 5 software products totalling 24 million with total leasing 6 costs of 5 million, it doesn't say with leasing costs 7 increasing by 5 million. It doesn't say that. 8 That may be the case, it's just not, you know, 9 in terms of the wording, it didn't really jump out at me as 10 that. 11 Q: In the first paragraph under heading 4, it 12 states: 13 "The increase in the 2001 budget relates to 14 software licenses for the existing and new 15 applications that were not included in the 16 2000 budget? So you -- 17 A: Where was that -- where does it say that? 18 Q: This is on the first paragraph under 19 heading 4. 20 A: On page...? 21 Q: On page 2. 22 MADAM COMMISSIONER: See, part of the 23 difficulty, Ms. Ryley, is you're asking him -- I understand 24 why you're asking him, he was the former Budget Chief, and so 25 he can read these things probably better than any of us here

1 in this room. 2 But he wasn't there at the time, and would 3 never have read any of these documents until they appeared in 4 this binder and so the difficulty is, is how far do you want 5 him to go with something that he wasn't responsible for or -- 6 THE WITNESS: I will make -- 7 MADAM COMMISSIONER: -- he never read. 8 THE WITNESS: -- oh, I'm sorry, I'm very 9 sorry. 10 MS. BAY RYLEY: I do appreciate that, and I -- 11 I'm really just looking for assistance to try to understand 12 this document. 13 14 CONTINUED BY MS. BAY RYLEY: 15 Q: I'm not suggesting any kind of 16 responsibility on your part, I just simply want to bring -- 17 under -- have a reasonable understanding of this important 18 document. 19 A: One (1) of the problems in answering the 20 question. I want to -- I want to answer this question 21 because I think it can assist the Inquiry. 22 MADAM COMMISSIONER: Okay. 23 THE WITNESS: One (1) of the problems I have 24 in trying to answer and piece together this particular issue, 25 where it went to the Budget Committee, and given the fact I

1 wasn't on the Budget Committee at that time, I wasn't there. 2 I can give you a fairly unbiassed viewpoint, I think. 3 What I would expect, and what I think a City 4 Councillor would expect, or what we would have read if 5 reading this document, would be that it's a -- it's a -- it's 6 a document that reports out on -- on where these program 7 expenditures are, and what adjustments or what points have to 8 be made so we're kept up to date, so to speak. So, it's 9 really a catch up -- a get you up to date issue. 10 I -- I didn't read any of this as a budget 11 variance. And -- and you asked me a question about a budget 12 variance earlier. So, if the leasing costs had ballooned, or 13 had gone beyond, I would normally look for that in a budget 14 variance report. 15 I'm -- I'm not saying that it -- it isn't 16 contained in this report, I'm not saying that it couldn't be 17 contained in this report, I'm saying, that's where I would 18 have normally anticipated it. 19 And the second point I would make to you is, 20 generally speaking, you're looking at recommendations. We 21 had an earlier issue here where I was asked about an 22 amendment I made, and I was pointed out that there was a -- a 23 mention in the discussion part about a two (2) year 24 extension. But I don't see it in the recommendation. It -- 25 it -- it's not necessarily something that's a given.

1 And I -- and I can actually refer -- I could 2 probably somewhere in my life refer to situations where 3 something was mentioned in a discussion, but it wasn't voted 4 on as a recommendation, and so it's not necessarily part and 5 parcel. 6 And in this particular case, I'm not sure what 7 all these numbers ultimately boil out that you're asking me 8 about but if they boiled out to costs going up and costs 9 going beyond, I would normally look for it in the 10 recommendation as opposed to the body. 11 But it's a very wide report that covers a 12 number of different areas, debt charges, capital current, 13 housing recovery. This is only one of many issues and it's 14 not uncommon for them to produce reports like this and cover 15 a number of areas but it's not always as clear as -- as you 16 might, that I might or someone else might catch. 17 18 CONTINUED BY MS. BAY RYLEY: 19 Q: Okay. 20 A: I hope that helps you. I don't know. 21 Q: It does. I'm going to keep this as simple 22 as possible -- as simply as possible. On that -- on the 23 issue of -- what you're mentioning about recommendations and 24 -- and what is and what isn't in the recommendations, on page 25 1, Number 1 is the -- it says:

1 "It is recommended that the non-program 2 budget as amended contained in this report 3 be adopted." 4 A: Yes, but, if I can be specific to you, you 5 can make that recommendation, the recommendation is correct. 6 If you flip the page, you can go through the individual 7 numbers but I guess what I'm saying to you is it would be 8 different if the first recommendation was that the non- 9 program budget as amended contained in this report be adopted 10 and the Council approve the following changes. 11 And if you identify, well you budgeted this 12 but you ended up with this, you budgeted for this, you ended 13 up with this, it's a little simpler or a little clearer, but 14 that's not to say that this is an inaccurate way of doing it. 15 Q: But you'd agree that you couldn't possibly 16 make a decision based on -- on that recommendation because it 17 refers to you what is contained in that report so anyone 18 reading that report would -- would -- wouldn't know what 19 those amendments were unless they actually reviewed them, 20 correct? 21 A: Yes, but it's -- I just point out, okay, 22 that the answer to your question is yes. I, personally, 23 don't think I would have made out what this meant in terms of 24 increased costs but I want to also point out that this report 25 is not uncommon.

1 That these type of reports saying here are a 2 bunch of changes or adjustments or whatever and they're -- 3 they're fairly vague and they just capsulize it, it's not 4 uncommon. So I'm trying to make two (2) points here without 5 -- you know, this is just an opinion. It's not something 6 that I was there for but my opinion on this is that it's not 7 an uncommon report. 8 It's not uncommon for these things to be 9 vague. It's not uncommon to give you a whole pile of items 10 that are not contained or are just capsulized in one little 11 recommendation but the reality is it's not crystal clear. 12 Q: And in this Recommendation 1, it's not 13 even that that recommendation is even complete. There really 14 isn't any information at all -- 15 A: See -- 16 Q: -- unless you refer to the report? 17 A: Yeah, you see, because it's not telling 18 you at the end of the day, you know the -- well, it is 19 telling you that there's increases but they're not specific 20 on where and how and why and that's not uncommon in any 21 department. 22 Q: It is specific that there are -- you agree 23 then that it is specific there are increases? 24 A: Well, yes, because it's says here -- in 25 financial implications it says:

1 "In aggregate, 2001 net program -- net 2 expenditures account have increased by 25 3 million on a net basis to reflect increased 4 tax revenue." 5 Right? So there's increase expenditures also 6 reflected by increased tax revenue, 866 million in true 7 growth and 7 million -- 17 million in vacancy rebates. Hold 8 on a second, let me read that again. 9 10 (BRIEF PAUSE) 11 12 13 A: This says that the aggregate 2001 non- 14 program net expenditure accounts have increased by 25 million 15 on a net basis to reflect increased tax revenue. 866 million 16 due to true growth and 17 million in vacancy rates. That 17 doesn't necessarily tell me that -- that the increase is an 18 increase as the result of program expenditures or non -- non- 19 program expenditure increases. 20 Q: Okay and if -- if we go to under Number 4 21 about the computer leases, the first sentence under there is 22 -- refers to an increase in the 2001 budget, correct? 23 A: Yes. 24 Q: And that relates to software licenses, the 25 existing and new applications that were not included in the

1 2000 budget? 2 A: Yes. 3 Q: So, these were amounts that were not 4 included previously, and now are being included. So, it's an 5 increase? 6 A: Correct. 7 Q: An increase arises from -- over on page 3, 8 they amount to 24.35 million, and the explanation there is 9 that: 10 "In order to support the expanded 11 infrastructure, software licenses for 12 products, such as software automation 13 tools, on-line report viewing, testing, 14 databases and desktop management were 15 required as part of the Y2K platform." 16 A: And as I said to you, that paragraph does 17 not, in my mind, clearly tell me which is which. 18 Q: What -- 19 A: Like how these things add up. 20 Q: -- well, it states here that the costs for 21 those products total 24.35 million? 22 A: Yes, but is that part of the 43 million? 23 Does that include the 5 million in leasing costs or not? I 24 don't know. 25 Q: The costs -- the costs of the products is

1 24.35 million; correct? And the leasing cost is 5 million, 2 and those are two (2) different things? 3 A: Not necessarily. 4 Q: The total leasing cost -- 5 A: Because the lease -- the lease -- ma'am, 6 the $5 million lease, that -- that could be leasing all the 7 above, or part of the above. You -- you know, it could be 8 leasing part of the 24.35 million, I don't know. 9 I'm just guessing here, eh, I'm just telling 10 you what I would read from it, but I can't -- I can't tell 11 you that that's -- when you ask me the question that way, I 12 can't give you a yes or no on that one (1), because I don't 13 know. 14 Q: Can we agree that -- 15 MADAM COMMISSIONER: I don't know that we can 16 go much further on -- 17 MS. BAY RYLEY: Okay. 18 MADAM COMMISSIONER: -- on this. He's just 19 giving his interpretation as best he can, but he wasn't 20 there, and he's trying to help, but I mean in the final 21 analysis, I'm going to have to make a decision as to whether 22 it was as clear as you think it is, and as he doesn't think 23 it is. 24 But it's just that he -- I'm just not sure 25 that he's the right person to be asking this question of, Ms.

1 Ryley. 2 3 CONTINUED BY MS. BAY RYLEY: 4 Q: If you could turn to Tab 68. 5 6 (BRIEF PAUSE) 7 8 Q: Begdoc 35037. 9 A: Yes, I have it. 10 Q: And over on the -- on the next page it 11 says that this report, at the bottom there, was prepared by 12 Tom Perdikis from Budget Services, on March 12th, 2001. 13 A: Yes. 14 Q: And it says it was circulated to the 15 Budget Advisory Committee, and I understand that at that date 16 you were no longer at the City of Toronto? 17 A: I can't see the date, where is it? 18 Q: Sorry, it's at the bottom of page 2, and 19 it's March 12th, 2001. 20 A: Oh, okay. So, this is the document I 21 wasn't there for, okay. 22 Q: No, but at the -- yes, you weren't -- were 23 not there as of March 12th, 2001, as I understand it, but it 24 refers to some requests from the Budget Committee for 25 November 1998. At which time you were -- you were on that

1 Committee. 2 A: Okay. 3 Q: Is that correct? 4 A: Yes, I was in November '98, yes. 5 Q: And there's three (3) recommendations for 6 this report, that the report -- this is at the bottom of page 7 1: 8 "Report be received for information. That 9 the Budget Advisory Committee officially 10 close the Year 2000 Business Continuity 11 Project, and that the Budget Advisory 12 Committee refer this report to Council for 13 information." 14 So, this report was intended to go to Council 15 for their information? 16 A: Okay. But again, if it's a receipt 17 report, it may or may not have gone. I'm just pointing out, 18 you may have that information, I just -- I just -- I take it 19 that when you tell me this you've asked me a question and I 20 wouldn't know. 21 Q: At the top of this page, refers to the -- 22 the Y2K Business Continuity Plan that was November 3rd, 1998, 23 which was dated November 3rd, 1998, and authorized by the 24 Chief Administrative Officer, the Chief Financial Officer and 25 Treasurer, and the Commissioner of Corporate Services, and it

1 states that that report was approved by the Budget Committee 2 on November 11th, 1998. I assume the Budget Committee is the 3 same committee as the Budget Advisory Committee? 4 A: Yes. 5 Q: "Upon approval the Budget Committee 6 requested the director of the Y2 -- year 7 2000 project report to the Strategic 8 Policies and Priorities Committee on an 9 ongoing basis on the status of the year 10 2000 compliance of all A B C's in the new 11 City of Toronto and secondly that the 12 Auditor and Chief Financial Officer ensure 13 due diligence, adequate spending control 14 and appropriate checks and balances are in 15 place in the administration of the year 16 2000 project office." 17 A: Yes, I remember that. Yes. 18 Q: You recall this? 19 A: Oh, yes. 20 Q: Which -- what part of this do you recall? 21 Making these -- 22 A: Making sure that the auditor was there. 23 Q: What did -- what did the City Auditor 24 actually do to carry out this role, to ensure that due 25 diligence, adequate spending controls and appropriate checks

1 and balances were in place? 2 A: I personally wouldn't have any knowledge 3 as to what he did. I just know that that was something that 4 we -- we wanted to make sure of because of the fact that 5 there was so much money that was going to be spent in such 6 little time. 7 Q: So you're not aware of what, if anyth